How can revenue management systems help the hospitality sector?

Demand-change often brings new challenges and opportunities. In recent times, the necessity of revenue optimization is echoing across all businesses of the hospitality sector.

Over sixteen months of fighting back the pandemic, we are on the path to recovery. However, it’s difficult to gauge: 

1. When will the world entirely reopen?
2. When will the hospitality and tourism industries work to their capacity?
3. When will the peak season arrive?
4. When will the demand return and
5. How will inventory be priced?

because traditional revenue management approaches are no longer reliable.

The hotel revenue management landscape 2019 reported that more than 80% of hotels worldwide did not use any sophisticated technology to apply smart pricing or revenue enhancement strategies.

Today, making informed and confident decisions is in turmoil. Hoteliers need access to substantial data and the right resources to forecast revenue and predict peak travel demand. Particularly in the post-COVID-19 era, revenue management systems are going to be the solution to derive market insights and make data-driven decisions to strategically optimize revenue. 

Some of the prime reasons why the hospitality industry should weigh in on revenue management systems are:

1. Multidimensional analysis for better market insights: New-age revenue management systems are beneficial in deriving expertise from in-depth and comprehensive analysis to measure business performance. It helps in outlining the current market position and scope of improvements of the property to decide on the course of action.

2. Customized, intelligent pricing for higher occupancy: Forming the core of revenue management systems, intelligent pricing works upon several factors such as current occupancy, seasonality, lead time, weekday or weekend constraint, among others, to sell the inventory at the optimum price. Pricing binds together the upsell techniques and market insights to ensure occupancy in peak/low seasons, predictable/unpredictable trends, and high/low demands.

3. Knowledge of guest booking behaviour: The detailed analysis needed for a workable revenue strategy unveils guests’ booking patterns. It showcases what rooms they majorly prefer, how early they book, and at what rates. It unlocks a new avenue for applying optimum pricing and targeting a different segment at the right rate for the right dates. Booking pattern analysis and subsequent pricing strategy could result in higher occupancy and increased room nights.

4. Accurate demand and occupancy forecasting: Analyzing historical data of the past year, month, last peak season, and events lead to deriving reliable forecast reporting. Demand and occupancy forecasts help in precise revenue predictions. Revenue management systems produce comprehensive on-demand forecast reports. It allows hoteliers to plan upcoming season, week, or month’s availability at appropriate rates on suitable distribution channels.

Since revenue management systems nearly automates  revenue optimization, hospitality personnel can now focus on creating value for their guests and engage in crucial service ideation, deployment to ensure guest satisfaction.

The intelligent dynamic pricing software utilizes real-time data sets to calculate prices and optimize revenue. Every accommodation provider, however large or small, needs revenue optimization for the longevity of their properties. Furthermore, it is also vital for implementing intelligent pricing, extensive market insights, complete compset analysis, guest segmentation, and reliable forecasting. Accurate inventory distribution at the right rates results in higher occupancy and revenue enhancement. Thus, revenue management systems are inevitable to plan business revival in the post-pandemic era.

This is an authored article by Harshdeep Khatri, C.T.O at eZee Technosys.